RICHMOND, Va. (WRIC) – The $2 billion proposed plan to relocate the NHL’s Washington Capitals and NBA’s Washington Wizards to Virginia “will not move forward” after the city of Alexandria said it ended talks on the project.
A handshake deal on the arena project was announced in December by Gov. Glenn Youngkin and Ted Leonsis, the founder and CEO of Monumental Sports and Entertainment, which owns the teams.
The proposed deal — which also included the city of Alexandria and real estate developer JBG Smith — called for a 9-million-square-foot entertainment district on a 70-acre site in Alexandria’s Potomac Yard neighborhood with a new area where the teams would play.
“The City of Alexandria has ended negotiations related to the Potomac Yard Entertainment District opportunity and the proposal will not move forward,” the city said in a statement Wednesday.
Leonsis and D.C. Mayor Muriel Bowser are slated to speak at the Capital One Arena, where the teams currently play, at 6 p.m. The Washington Post and Associated Press are reporting the two sides have reached a tentative agreement that would keep the teams in D.C.
Youngkin’s office touted the arena project, which was a priority for the governor, as a “big win” for Virginia, saying it would create 30,000 jobs and bring billions in revenue to the state’s coffers.
In a statement responding to the news, Youngkin said that “Virginians deserve better” and laid blame on state lawmakers who quashed legislative efforts to help pave the way for the project.
“This should have been our deal and our opportunity, all the General Assembly had to do was say: ‘thank you, Monumental, for wanting to come to Virginia and create $12 billion of economic investment, let’s work it out,’” Youngkin said.
“But no, personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that created tens of thousands of new jobs and billions in revenue for Virginia,” he continued.
Negotiations over the project stalled in the Virginia General Assembly, with Democrats and Youngkin going back and forth in recent weeks about the deal’s financing structure.
Legislation to form a sports and entertainment authority that would issue bonds for the project and oversee its development was filed by powerful Democrats in both chambers.
And while the House of Delegates passed its version on a bipartisan vote, both bills met the same roadblock in the Virginia Senate: Finance and Appropriations Chair L. Louise Lucas (D-Portsmouth). Sen. Lucas did not docket either bill in the committee, ultimately killing them both.
Lawmakers then approved a spending plan for the current fiscal year without language for the new arena after Senate Democrats, led by Sen. Lucas in budget talks, cut it out. The move drove Youngkin to publicly criticize Senate Democrats during a press conference in early March where he called the decision “a colossal mistake.”
Under the proposed deal, the $2 billion sports and entertainment district would have included a new arena, a performing arts venue, retail shops, hotels and more.
The sports and entertainment state authority would have owned the land and entered a 40-year lease with Monumental Sports, which would have paid $403 million upfront. Alexandria would have paid $106 million for a performing arts venue in the proposed district.
“As stewards of the City’s economic health and development, City leaders believed the Potomac Yard Entertainment District opportunity was worthy of community discussion and Council consideration,” the city’s statement continued. “We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. We trusted this process and are disappointed in what occurred between the Governor and General Assembly.”
Sen. Lucas was publicly critical of the project, sharing concerns over the framework of the deal’s financing, including fears that taxpayers could have to pay for the bonds if the project doesn’t hit certain economic projections.
Lucas told reporters she didn’t support the arena deal because she believed it would “further enrich billionaires.”
In his statement, Youngkin thanked Leonsis, Monumental, the city of Alexandria, JBG Smith and other partners “for their professionalism, belief in Virginia and fortitude.”
“Congratulations to Monumental for striking a great deal, I’m sorry you won’t be in Virginia,” Youngkin said.
This story is developing. Check back for updates.
